The week the AI scare turned real and America realized maybe it isnt ready for whats coming
Summary
The highly speculative, but deeply resonant essay painted a doomsday scenario of a “human intelligence displacement spiral” where AI agents rapidly replace software engineers, financial advisors, and middle management. Analysts and economists responded throughout the week that the economics implied by Citrini’s argument were unsound, but on Thursday, Twitter co-founder and current Block CEO Jack Dorsey stunned the market by announcing a massive 40% downsizing of his company’s ranks. The disconnect that misses millions falling off the white-collar cliff Veteran macroeconomic analyst Albert Edwards of Societe Generale is a certain type of famous in the finance world for his alternative, somewhat contrarian views, which the French investment bank stresses do not reflect its house opinion. In 2023, he wondered aloud in his weekly strategy note about the phenomenon of “greedflation” signaling potentially the end of capitalism, as record high profit margins indicated that corporations were raising prices more than they needed to, with the working and middle classes suffering as a result. Bank of America Research, for its part, claimed the “apocalyptic narrative” about AI “doesn’t square well with sound economic theory.” Global economist Claudio Irigoyen wrote on Friday that the selloff in markets to “a combination of crowded positioning and multiple equilibria, similar to a bank run triggered by unfounded rumors of insolvency,” similar to warnings from UBS’ Paul Donovan and Apollo Global Management’s Torsten Slok that retail traders’ prominence is leaving markets vulnerable to narrative and knee-jerk movements.